Monday, August 08, 2005

Not So Fast, Mr. Koizumi

A month ago, the lower house of the Japanese Parliament narrowly passed a measure to break up and partially privatize the country's postal service which is also Japan's largest savings institution with nearly $3 trillion in deposits. At the time I tried to describe why this is such a big deal. It turns out that the measure was defeated in the upper house, which is similar to the British House of Lords. Prime Minister Junichiro Koizumi has dissolved Parliament and called new elections in an effort to revive his economic reforms:
Proponents of the reform said it was needed to put the postal saving system's massive deposits into the hand of private investors and provide a strong jump-start to the economy, which is only now emerging from a decade-long slowdown.
Privatizing Japan Post, which has $2.9 trillion in savings and insurance deposits, would create the world's largest bank.
Those funds have financed the massive public works projects central to the LDP's pork-barrel system, while the network of unionized postal workers has long proved a bastion of support for the party.


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